Slate Money: The Peripatetic Headquarters Edition

Podcast: Slate Money
Date: September 9, 2017
Host: Felix Salmon (Fusion)
Guests: Anna Szymanski, Jordan Weissmann, Jacob Weisberg (Chairman of the Slate Group)

Episode Overview

This episode unpacks major business and finance stories of the week, diving into the economics of concert ticket scalping (with a focus on Taylor Swift's "Verified Fan" initiative), the changing models for monetizing media (subscriber models, nonprofit arms), and the nationwide competition for Amazon’s new headquarters. The discussion is lively and sharp, mixing analysis with pointed humor and debate.

Key Discussion Points & Insights

1. Taylor Swift, Ticket Scalping, and Verified Fans

(00:09–17:04)

• Overview:
  The hosts explore the persistent issue of scalpers dominating ticket sales for major artists like Taylor Swift and the new approaches being used to combat it.

• Ticket Scalping Schemes:

  • Example given of Craig Carton’s Ponzi scheme—claiming industry connections to buy tickets at a discount and resell​​ (04:04).
  • Scalping described as “arbitrage” or “price discovery,” but with a bad reputation (05:43).

• Ticketmaster's Role:

  • Ticketmaster criticized for selling only a small fraction of tickets at face value, moving many to its own resale platforms at market rates (06:02).
  • Quote: “You feel like you’ve been mugged... not just as if the whole system involved, the fees are really high and there’s just this kind of shadow.” – Jacob Weisberg [12:38]

• Taylor Swift's Tactics:

  • Utilizes Ticketmaster’s "Verified Fan" system but adds her own requirements, rewarding superfans who engage with her brand on social media, buy merch, and drive up her stats for better access to tickets (09:08–10:25).
  • Criticism that it's more about monetizing fandom than pure fan access.
  • Memorable Quote: “The way you really get the points is by spending money.” – Felix Salmon [10:32]

• Ethical and Business Concerns:

  • Debate over whether it’s better for money to go to artists than scalpers.
  • Springsteen contrasted with Swift: Springsteen aims to play for all fans, not just wealthier ones (12:07).

2. The Evolution of Media Revenue Models

(17:04–30:43)

• Traditional vs. Modern Media Funding:

  • Jacob Weisberg outlines the decline of traditional media revenue, with ad dollars shrinking and audiences conditioned to expect free online content (17:25–19:00).

• Recent Sales of Legacy Brands:

  • Washington Post (bought by Jeff Bezos), The Atlantic (Lorraine Powell Jobs/Emerson Collective), New York Daily News (Tronc), and the erosion in value for these storied names (19:00–21:49).
    • “Owning publishing enterprises… has always been about an element of vanity and political influence… even if they never make money.” – Jacob Weisberg [23:02]

• Subscription, Membership, and Nonprofit Models:

  • Surat shift to direct-from-reader revenue (memberships like Slate Plus and The Guardian’s 501(c)3 nonprofit status).
  • Slate Plus: Not a hard paywall, but a membership offering benefits and ad-free content.
    • Quote: “We want people to support us because it’s a virtuous thing to do and because they’ll get things they want to have.” – Jacob Weisberg [30:11]

• The “Fan Club” Analogy:

  • Comparison to arts organizations like the Public Theater, which prioritize members for tickets—a model the group muses could work for other industries (15:09–16:56).

3. Amazon’s Bidding War: The Peripatetic Headquarters

(30:43–42:14)

• Amazon’s HQ Competition:

  • Cities across North America compete for Amazon’s second HQ, with promises of tens of thousands of jobs and billions in investment (31:36).
  • Concerns about "race to the bottom" bidding, tax incentives, and the ethics of pitting cities against each other for corporate favor.

• Discussion — Feasibility and Motivation:

  • Skepticism about whether dual headquarters is efficient. Comparisons to other multihub companies like Unilever and Thomson Reuters, with consensus that split HQs often create inefficiency and executive travel nightmares (33:59).

• Economic and Urban Impact:

  • Critical look at cities making major concessions for potential gains, and the possible distortion in labor markets or real estate (36:17–38:15).
  • “When you politicize this and you force a bunch of cities and states to come groveling to you… is that a great look?” – Felix Salmon [37:11]

• Speculation — Which City Will Win?:

  • Guesses range from Toronto to Austin to Baltimore, weighing infrastructure, costs, and strategic benefits (39:52–41:20).
  • Dismissal of Toronto based on "optics"—unlikely Amazon would make U.S. mayors compete only to select a Canadian city (41:24).

Notable Quotes & Memorable Moments

• “You put all of the effort into doing it and then you’re like, now I have this endowment effect and I’m not going to sell my ticket…” – Felix Salmon (on Taylor Swift’s Verified Fan system, [09:12])
• “It’s all about the scale of losses.” – Jacob Weisberg (on why wealthy individuals buy unprofitable media properties, [23:02])
• “We have both angles working in our favor… an element of conscience [and] a value proposition” – Jacob Weisberg on Slate Plus [29:27]
• “There's a Hunger Games aspect of it that's not ideal” – Anna Szymanski on cities competing for Amazon HQ [37:34]

Timestamps by Segment

| Timestamp | Segment / Key Topic | |-----------|---------------------------------------------------------------------------| | 00:09–17:04 | Taylor Swift, ticket scalping, Ticketmaster, Verified Fan innovations | | 17:04–30:43 | Media funding models: subscriptions, memberships, legacy print sales | | 30:43–42:14 | Amazon HQ2 "Hunger Games", regional economics, speculation | | 42:14–46:47 | “Numbers Round” — striking recent statistics from business/media |

Numbers Round — Quick Hits

(42:14–46:47)

• $2.29 — Per-pound price for organic chicken at Whole Foods after Amazon acquisition (Jacob Weisberg [42:21])
• 6.3 million — Tax bill that shuttered independent Cambodian newspaper (Anna Szymanski [42:59])
• $2.2 billion — Price for the Houston Rockets NBA team, a sports franchise record (Felix Salmon [43:57])
• 257 million — Filecoin raised this in its ICO, raising ICO market concerns (Jordan Weissmann [45:13])

Tone & Style

The episode is conversational, witty, and slightly irreverent—balancing robust economic and business analysis with casual anecdotes and friendly banter. The hosts aren’t afraid to be critical of industry practices or poke fun at one another.

For Listeners Who Missed the Episode

This episode offers a smart primer on the economics of event ticketing, the ongoing reinvention of media business models, and the realpolitik behind Amazon's high-stakes headquarters search. You'll hear not just facts but pointed debate about the ethical and practical consequences of how money flows in media, music, and tech. Notable moments include sharp critiques of Ticketmaster's practices and Amazon's HQ "Hunger Games," plus real talk about whether new funding models for journalism are sustainable.

Memorable outro: Felix and crew riffing on Taylor Swift’s “Look What You Made Me Do,” bringing things full circle with humor and pop culture flair.